Research Unit Going to China, Pfizer says Company Plans Gradual Move of Antibacterials Operations to Shanghai

March 16--Pfizer Inc. plans to move its antibacterials research
unit in Groton to Shanghai, China, but said some local scientists
involved in the research will remain in Groton for up to two years
as the company builds the new Shanghai unit.

Analysts said allowing the local researchers, who are working on
antibiotics to fight the scourge of superbugs such as MRSA, to
remain in Groton lets them see their late-stage experimental drugs
to conclusion, while relatively new programs will move to China as
soon as the unit there opens.

Industry analysts said Pfizer's action would be the first
wholesale move of a major U.S. pharmaceutical research unit to
China. Previously, U.S. firms had relied on China mostly for
support functions rather than high-level discovery work.

"Ten years ago, no one would have thought to go to Shanghai,"
said James O'Malley, a former Pfizer researcher who now runs the
New London biotech firm Myometrics.

"It's an acknowledgment of labor cost and high intellect in
China," added Larry Rothman, a respected industry blogger.

O'Malley and another industry executive, who didn't want to be
named because his company does business in China, said placing a
major research unit in Shanghai would garner favor from Chinese
officials, giving Pfizer more ready access to the huge potential
drug market there.

"It's the same in Europe," O'Malley said. "You can't sell unless
you manufacture in Europe."

Some analysts said the Pfizer move could be a way to skirt the
strict regulatory guidelines of the U.S. Food and Drug
Administration. But others said they weren't sure Chinese standards
are any looser than in the United States and wondered whether
clinical trials conducted in China would be accepted by the
FDA.

Antibacterials research has not been fruitful of late, and
antibiotics aren't huge sellers because so many generic medicines
are available. Moving the antibacterials research unit to Shanghai
could be a way for Pfizer to maintain a presence in the field at a
lower cost than remaining in Groton.

Pfizer said in an e-mail that it will continue to run clinical
and pre-clinical programs related to antibacterials research at its
Groton research site "to ensure uninterrupted progress on these
important programs."

"This means Groton will continue work on current projects in
antibacterials," according to Pfizer spokeswoman Sperry Mylott.

Pfizer has already said its antibacterials unit would be leaving
Groton as part of a downsizing of its local
research-and-development hub. Pfizer would not furnish specifics
about its planned move to China, but in 2009 Pfizer officials said
they planned to expand an existing research site in Shanghai and
said the city would house one of the company's main global R&D
sites.

"We are shifting the global footprint of our R&D network to
more fully align with key hubs for science and technology, which
has caused us to take a look at all areas of research," Pfizer said
in an e-mail response to questions about the move to Shanghai.

Other changes in Pfizer's R&D operations includes a
downsizing of the Indications Discovery Unit in St. Louis, which
attempts to find new uses for older drugs. Pfizer said it plans to
continue a collaboration with Washington University in St. Louis
that enlists academics' help in finding new uses for Pfizer's
established products.

Pfizer said its Groton autism unit will make the move to
Cambridge, Mass., along with those neuroscience staff asked to stay
on. But the company had no specific information on when
neuroscientists or those associated with Pfizer's cardiovascular,
metabolic and endocrine disorders unit would be moving to
Massachusetts.

Pfizer said its plans to vacate its New London office towers are
on track to be completed at the end of the year, when the
site&apos;s transition to Electric Boat is completed. Pfizer
said the downsizing of its overall local presence has not changed
the schedule for scientists to leave New London.

l.howard@theday.com

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